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This episode features US Patent Attorney JD Houvener, from the virtual boutique law firm Bold IP. He works with inventors, business owners, artists and authors. After starting his career in Industrial and Systems Engineering at the aircraft manufacturer, JD he went to business school and was then inspired to become a patent attorney. So he went to law school and eventually opened his own practice, Bold IP. He has 3 ideas and inventions pending patent registration himself. One is a new business structure for law firms, and the other two—a baby seat invention and a helmet protection device—have been inspired by his experience of being a parent of young children.
JD covers both sides of the intellectual property experience, both as the inventor himself and as the legal mind involved in protecting IP. His firm offers full service business planning that comes with the technology protection. It goes beyond just the invention and technology and towards helping protect the business name and move their business forward. In this episode, JD shares his expertise about the different types of intellectual property protection that exists, and what creatives can do to protect their IP.
In this episode, you will learn:
• About the four main types of IP protection
• Why you should apply for copyright and/or trademark registration
• What creatives can do to check that they’re not infringing on another’s intellectual property rights
• All about patents
• Options for monetizing your IP through licensing
• What to do if you’ve been infringed
• How to protect yourself and your creations
The types of IP protection that creatives can get
There are four main types of IP protection: copyright, trademark, patent and trade secrets.
The usual domain that covers artists, authors and other creatives is copyright. When one person puts something from their mind onto something tangible, whether it’s a piece of paper, a canvas, or recorded media (electronically or on tape,) that’s artistic creation and it’s under copyright. The reason it’s so important is that as the artist, you want to make sure someone doesn’t take from what you’ve done and commercialize it without your permission. Copyright gives two big benefits. Firstly, right away, as soon as done, as soon as it’s fixed on the paper or recorded on media, you have common law copyright. Secondly, you can seek copyright registration to buttress that.
Trademark law is quite different. A trademark is all about making sure the consumer is sure where this good or service came from and so it involves brands, wordmarks and colours. Famous marks like McDonald’s or Nike are great examples because over time they become what customers know as the product. You see the swoosh or the golden arches and you know what the product is and where it’s going to come from.
In terms of patent law, there are two types of patent (in the US). There’s a design patent, which protects purely the way something looks. It’s not as common however as the utility patent, which most people are thinking of: mechanical gears, therapeutics or pharmaceuticals, electrical inventions and those sorts of things. There are three major requirements for a utility patent: it needs to be novel—the first of its kind, non-obvious—above and beyond the prior inventions, and it has to have utility and usefulness.
Trade secrets are those things that companies or individuals retain within their company that they could potentially seek patent protection for but they’ve decided to try to keep them secret because they don’t want to give it to the public at all. As part of patent law, you get a 20-year limited monopoly to make, use and prevent others from using it. However, trade secrets can go on as long as it remains secret, even hundreds of years. The Coca-Cola recipe is a good example, as they’ve had that secret for over 100 years.
Why apply for copyright or trademark registration?
Copyright is automatically granted as soon as you have created that piece of work, and in the UK you can’t actually file for copyright. However, as an artist anywhere in the world, if you want to seek protection for that work and be a documented author you can seek registration in the U.S. via the Library of Congress. There’s a few reasons for registering: it becomes a public record, it documents the date and the author and what the work was, it helps with any potential US court proceedings, and it will be observed by any of the US Government Agencies, including customs, so registration can potentially protect any infringing copies being imported to the U.S. It’s also fairly cheap to do, from US$50 to US$100. While it is paramount that it is done accurately and many people prefer to hire a professional like JD to help, it is possible to successfully complete the registration on your own.
As for trademarks, if you’re selling goods using a name, the common law rights that are given really only cover the geographical location of where your goods or services have been served. For example, if you’ve got a restaurant, assuming there’s no previously filed federal registration with the same mark, you’ll only be covered in the city or state where you’re serving customers.
Many companies these days, especially in services, are going well beyond the borders of the cities, states and even the country. Therefore, it is even more important now to do a national search at a minimum on your name before you begin selling. This ensures that a) you’re not infringing on another’s rights and b) you have a name that will be distinguishable between anyone else competing in the same industry. When you do all the hard work and your business succeeds, you don’t want to be having a legal issue of having to pay a royalty or going to trial because you’ve been infringing on someone else’s mark.
What creatives can do to check that they’re not infringing on another’s intellectual property rights
JD says you have to do your due diligence in this regard. At the very least, Google it! There’s also a really good government site, USPTO.gov that has good information readily available, good links and even some videos that cover the basics of trademarks and copyrights. There is also an easily searchable database for trademarks within the uspto.gov website, called the Trademark Electronic Search System (TESS). You can search terms, names of potential businesses and do a preliminary search there.
For copyright, what’s nice is that as long as it came from your own mind, it does not have to be unique. So as an artist, it’s not a requirement for your creative work to be unique, as long as it came from your mind only, and you didn’t get it from someone else.
In theory, someone could be painting the same painting or writing the same song at the same time and both would get copyright protection over their works. That’s very rare, but it could happen if they can prove they didn’t derive their expression from each other. It’s an interesting nuance of copyright law.
Inventor’s notebooks aren’t that useful these days, though. Since 2013, the American Invent Act has gone away from what’s called ‘first to invent’ to now a ‘first to file’ approach. First to invent is the way we used to behave and function and that’s where the inventor notebooks came in. These days, while it’s nice to have a notebook to document your thoughts, the impetus now is to make sure you file. If you’ve got something that’s potentially patentable, the incentives are to make sure you protect it because the government is now awarding merits to those who file first as opposed to those who try to prove prior ownership.
All about patents
In theory, if you have an invention in your head and think you could write it down with drawings and words, you should seek patent protection. Instead of trying to make it perfect, you can file a provisional patent application with broad terms and cover lots of different alternative embodiments, and over the course of a year you can really hone in on it and refine it.
It’s important to distinguish between types of patent applications. There’s no such thing as a provisional patent, there’s a provisional patent application. There are no rights given at the provisional stage or at all during the application stage. What the provisional application does do is allows you that early priority bid. As soon as you have the enabled version of your invention, where you can explain it in words and drawings, then you have to seek protection for it. The provisional application gives you up to one year to then file the non-provisional utility application that will make reference to the provisional. The major benefit is that earlier time that you’ll get in, which gives you benefits from the ‘first to file’ standpoint.
If you have started filing the patent and see someone else has started producing pretty much the same thing you’re claiming in a patent that hasn’t been granted yet, you have the ability to write them a letter about your prospective rights. Remember, you don’t have any actual vested rights yet, but by putting them on notice, you’re doing a big thing. They take a risk that if your rights do grant, they then become willfully infringing on your patent because you put them on notice.
It takes a while to get through the patent system, and in that scenario from earlier, if that company that you put on notice has been in business for a year or so before your rights are granted, they’re likely not going to want to shut down their whole systems. That’s where they can negotiate a license agreement with you as the owner to continue manufacturing.
Monetizing your IP through licensing
Once you have a right—copyright, trademark, patent—you can decide to monetize it and allow a 3rd party to use the intellectual property (make it, sell it etc.) or part thereof. You can give just a little piece of the IP, with restrictions, or you can license the whole thing and allow very few restrictions. You could say, ‘I’ll allow company X to make, use and sell this in Australia only.’ It’s contract law at its core but the IP is what’s being transacted so there are lots of different ways to slice it and make unique, custom transactions.
JD estimates the royalty rate on a non-exclusive license (where you’re allowing 2 or more companies to use it) to be between 2 and 5% of gross sale. On exclusive licenses you can get closer to 10% on royalties. Pharmaceuticals can go higher, while consumer products tend to be lower. Generally the more complex the invention, the higher the royalty rate.
What to do if you’ve been infringed
It can be an emotional thing if you believe you’ve found an infringer. You’ve got to make sure they are indeed infringing so JD recommends working with your attorney to look at your claims and at exactly how your alleged infringer is using the product. Having it validated that they really are infringing your granted patent claims is important. The next step is usually a Cease and Desist letter. If an individual or business gets a letter from an attorney, they’re likely going to take it very seriously. Most of these cases will settle, especially if there’s a strong case for infringement.
It is difficult to enforce this in other countries. JD doesn’t have any experience with patent or pre-litigation or litigation in foreign countries, but it gets extremely difficult trying to manage that. It comes down to making sure you have co-counsel, barred and registered in those other foreign countries.
You can go crazy trying to figure out if someone is stealing from you and monitoring it. Is it worth it to do that? It depends on what the piece is. If you spend months writing a book or a whitepaper, then maybe it is worth doing periodic, quarterly or even monthly checks on Google to see if anyone has picked it up. But it is all based on what value it is to you and your company and whether it’s worth your time, either to do it yourself or to hire an expert to do the monitoring for you.
Protecting yourself and your creations
In terms of blogging, which is very popular now, there are some minimum steps you can take. If it’s on your website and it was something you created personally (or someone on your team, so it’s the company’s IP), it is important to understand where it is being distributed to, and to identify yourself as the author and the year of creation. It adds merit and you’re creating a mini-registration by publishing it with the authors name, the company and the year of authorship.
Many artists get tripped up in when a work is a derivative work. When is a work different enough from prior works to be its own creation? It’s very difficult, especially in music. Once you have a track or album, it is important to have it reviewed for potential infringement. This is what a record label would do already, but if you’re independent, do your diligence and have a 3rd party listen to it. You can do similar types of inquiries for other artwork. JD doesn’t do a lot of that but there are others that specialize just in music and entertainment law.